Financial Facts: Don't kill the messenger

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I have been in the wonderful world of finance for close to 40 years. I have been around when the stock market crashed in 1987; in fact I was working in New York on that glorious day. I was around when the Dow went up and down like a roller coaster. I was around when the home-mortgage rates were in the double digits. All of these occurrences happened and I was there to witness them, but none of them was I responsible for. I was the messenger to my clients to either tell them the good news or the bad news. And I can remember most all the phone calls to inform the client of the bad news, very few of the good calls do I remember.

Today is no different than it was 10, 20 or 30 years ago. Good news such as a new mortgage has been approved or bad news such as a new mortgage was denied, in both situations I am only the messenger, so don't kill the messenger.

In the current mortgager world 90 percent of the mortgages are underwritten using guidelines set up one of four entities. Those are Fannie Mae, Freddie Mac, FHA and VA. The guidelines are set to document a minimum of information such as income, debt and your personal financial history.

If your personal credit history is such that your credit scores are too low to be acceptable to the lending agency, do not get mad at me. Don't kill the messenger.

Another large part of the mortgage process where I get blame is the management of a condominium complex. There are condo associations where fractional ownership has been allowed. Or there are time-share units in the complex. Or there is one owner who owns more than 10 percent of the total units in the complex. All of these disqualify the complex for funding by the four agency guidelines. Don't blame me, Don't kill the messenger.

Another item that goes with the mortgage process is the appraisal system. With all the fairly new processes that were instituted a couple years ago the system has become more expensive and way more cumbersome. The four agencies require that the investors basically use a third-party service to keep a list of appraisers and randomly choose an appraiser to do the inspection and final report. In most all purchases this is generally not a problem as the price is set by contact and a property is only worth what someone will pay for it. But in the cases of refinances, the possibility of a substandard value has been greatly increased. Appraisers are used from out of the area where the home is being refinanced and they are unfamiliar with that market. I have been forced into using substandard appraisers who now get paid no matter how bad the report is. Don't blame me for a bad appraisal. Don't kill the messenger.

Keep in mind that mortgage bankers make money by getting mortgages approved; we don't make money with mortgages denied. So, during the mortgage process keep an open mind and know we are here to assist in getting that all-important approval. You get that new home or lower interest rate on the refinance, we get paid. And life goes on!

For answers to your mortgage related questions, call Bob Kieber at (970) 453-4700 or email him at rkieber@centennialbanking.com. Bob is a local mortgage lender with Centennial Bank. He has 30-plus years of professional experience in real estate, finance and investments, and is a longtime resident of the High Country. Member FDIC, Equal Housing Lender. NMLS Bank #401640 Broker #289610. For tax benefit information please consult with a professional tax advisor. The opinions expressed are those of the individual, and do not necessarily reflect those of Centennial Bank.